Illinois-based Navistar may close some of its plants to cut costs

The truck manufacturer also cut 800 non-factory positions since August

October 5, 2012

Quinn Ford

(AP/File)
Navistar is considering closing plants in an effort to cut costs.

The Lisle-based company Navistar may close some of its plants to help cut costs. A company spokesperson said on Friday Navistar is analyzing its “manufacturing footprint.”

The news comes after a new CEO, Lewis Campbell, took the helm of the truck-building giant in August.

Many analysts have taken a more cautious stance towards Navistar in the last few months, according to Reuter’s data.

But Basili Alukos, an equity analyst for Morningstar, said he believes the new CEO is turning the company around. As of Friday afternoon, Navistar stock was trading at around $21 per share, but Alukos said he thinks it is worth closer to $40.

“I think there’s been a big turnaround, and I think the market’s missing that the company is trying to right their cost structure,” Alukos said.

Stocks have plummeted since the beginning of the year after the company’s new engine technology failed to meet federal emission regulations. 
Under Campbell, the company has made the decision to switch engines. But Alukos also said the company has a problem with its unfunded pension liabilities.

“They’ve done everything they could to mess up their market share,” Alukos said. “There is an allegiance towards the international nameplate, and I think over time as they actually get an engine...plus they improve their costs and operations I believe the shares will ultimately increase.”

In August, Navistar reached out to 6,300 employees to see if they would take voluntary buyouts. About 3,400 of those employees were in Chicago. Navistar has announced 800 non-factory positions were cut since then.

A Navistar spokesperson did not say how many of those layoffs or how many of those cuts affected Chicagoland workers, but she said the company does not plan on cutting any more positions, at least for now.